THE COMMISSIONER OF CUSTOMS and THE

COLLECTOR OF CUSTOMS vs.EASTERN SEA

TRADING
FACTS:
> Respondent Eastern Sea Trading was the consignee of several
shipments of onion and garlic. Some shipments came from
Japan and others from Hong Kong. In as much as none of the
shipments had the certificate required by Central Bank Circulars
Nos. 44 and 45 for the release thereof, the goods thus imported
were seized and subjected to forfeiture proceedings for alleged
violations of section 1363(f) of the Revised Administrative Code,
in relation to the aforementioned circulars of the Central Bank.
> Collector of Customs of Manila rendered a decision declaring
said goods forfeited to the Government and the goods having
been, in the meantime, released to the consignees on surety
bonds.
> On appeal taken by the consignee, said decision was affirmed
by the Commissioner of Customs.
> Consignee sought a review of the decision of said two (2)
officers by the Court of Tax Appeals, which reversed the decision
of the Commissioner of Customs and ordered that the
aforementioned bonds be cancelled and withdrawn.
> Hence, the present petition of the Commissioner of Customs for
review of the decision of the Court of Tax Appeals.
> CONTENTIONS OF RESPONDENT:
(a) Central Bank has no authority to regulate transactions not
involving foreign exchange;
(b) shipments in question are in the nature of "no-dollar" imports;
(c) shipments do not involve foreign exchange;
(d) seizure and forfeiture of the goods imported from Japan
cannot be justified under Executive Order No. 328, not only
because the same seeks to implement an executive agreement
extending the effectivity of our Trades and Financial Agreements
with Japan which (executive agreement), it believed, is of
dubious validity, but, also, because there is no governmental
agency authorized to issue the import license required by the
aforementioned executive order.
ISSUE:
Whether or not the said Executive Order is valid?
RULING:

Nos. 44, and 45 have already been passed upon and repeatedly
upheld by this Court for the reason that the broad powers of the
Central Bank, under its charter, to maintain our monetary stability
and to preserve the international value of our currency. Connote
that the authority to regulate no-dollar imports, owing to the
influence and effect that the same may and do have upon the
stability of our peso and its international value.

Classes of agreements heretofore entered into by the

Executive without the approval of the Senate. They cover such
subjects as the inspection of vessels, navigation dues, income tax
on shipping profits, the admission of civil aircraft, customs
matters, and commercial relations generally, international claims,
postal matters, the registration of trademarks and copyrights,
etcetera.

The Court of Tax Appeals entertained doubts on the legality of the

executive agreement sought to be implemented by Executive
Order No. 328, owing to the fact that our Senate had not
concurred in the making of said executive agreement. The
concurrence of said House of Congress is required by our
fundamental law in the making of "treaties" (Constitution of the
Philippines, Article VII, Section 10[7]), which are, however, distinct
and different from "executive agreements," which may be validly
entered into without such concurrence.

Lastly, the lower court held that it would be unreasonable to

require from respondent-appellee an import license when the
Import Control Commission was no longer in existence and,
hence, there was, said court believed, no agency authorized to
issue the aforementioned license. This conclusion is untenable,
for the authority to issue the aforementioned licenses was not
vested exclusively upon the Import Control Commission or
Administration. Executive Order No. 328 provided for export or
import licenses "from the Central Bank of the Philippines or the
Import Control Administration" or Commission. Indeed, the latter
was created only to perform the task of implementing certain
objectives of the Monetary Board and the Central Bank, which
otherwise had to be undertaken by these two (2) agencies. Upon
the abolition of said Commission, the duty to provide means and
ways for the accomplishment of said objectives had merely to be
discharged directly by the Monetary Board and the Central Bank,
even if the aforementioned Executive Order had been silent
thereon.

Treaties are formal documents which require ratification with the

approval of two thirds of the Senate. Executive agreements
become binding through executive action without the need of a
vote by the Senate or by Congress.
The right of the Executive to enter into binding agreements
without the necessity of subsequent Congressional approval
has been confirmed by long usage. From the earliest days of
our history we have entered into executive agreements covering
such subjects as commercial and consular relations, mostfavored-nation rights, patent rights, trademark and copyright
protection, postal and navigation arrangements and the
settlement of claims. The validity of these has never been
seriously questioned by our courts.
International agreements involving political issues or
changes of national policy and those involving international
arrangements of a permanent character usually take the form
of treaties. But international agreements embodying
adjustments of detail carrying out well-established national
policies and traditions and those involving arrangements of a
more or less temporary nature usually take the form of
executive agreements.
Agreements concluded by the President which fall short of
treaties are commonly referred to as executive agreements
and are no less common in our scheme of government than are
the more formal instruments treaties and conventions. They
sometimes take the form of exchanges of notes and at other
times that of more formal documents denominated
"agreements" time or "protocols".

YES. The authority of the Central Bank to regulate nodollar imports and the validity of the aforementioned Circulars

USAFFE VETERANS ASSOCIATION, INC., vs.

THE TREASURER OF THE PHILIPPINES
FACTS:
> The USAFFE Veterans Associations prayed in its complaint
before the Manila court of first instance that said Agreement be
annulled, that payments thereunder be declared illegal and that
defendants as officers of the Philippine Republic be restrained
from disbursing any funds in the National Treasury in pursuance
of said Agreement. Said Usaffe Veterans further asked that the
moneys available, instead of being remitted to the United States,
should be turned over to the Finance Service of the Armed Forces
of the Philippines for the payment of all pending claims of the
veterans represented by plaintiff.
> PLAINTIFFS CONTENTION:
(a) The funds to be "returned" under the Agreement were funds
appropriated by the American Congress for the Philippine army,
actually delivered to the Philippine Government and actually
owned by said Government;
(b) U.S. Secretary Snyder of the Treasury, had no authority to
retake such funds from the P.I. Government;
(c) Philippine foreign Secretary Carlos P. Romulo had no authority
to return or promise to return the aforesaid sums of money
through the so-called Romulo-Snyder Agreement.
> The defendants moved to dismiss, alleging Governmental
immunity from suit. Thereafter, it dismissed the complaint, upheld
the validity of the Agreement and the plaintiff appealed.
> HISTORY OF THE AGREEMENT:
- Foreseeing the War in the Pacific, President Franklin D.
Roosevelt, called into the service of the Armed Forces of the
United States, for the duration of the emergency, all the organized
military forces of the Philippine Commonwealth. His order was
published here by Proclamation No. 740 of President Quezon.
General Douglas MacArthur the team known as USAFFE.
- For the expenses incident to such incorporation, mobilization
and activities, the Congress of the United States provided in its
Appropriation Act.
- Out of the total amounts thus appropriated by the United States
Congress, P570,863,000.00 was transferred directly to the
Philippines Armed Forces by means of vouchers which stated
"Advance of Funds under Public law 353-77th Congress and
Executive Order No. 9011". This amount was used (mostly) to
discharge in the Philippine Islands the monetary obligations
assumed by the U.S. Government as a result of the induction of
the Philippine Armed Forces into the U.S. Army, and of its
operations beginning in 1941. Part of these obligations consisted
in the claims of Filipino USAFFE soldiers for arrears in pay and in
the charges for supplies used by them and the guerrillas.

- Of the millions so transferred, there remained unexpended and

uncommitted in the possession of the Philippine Armed Forces as
of December 31, 1949 about 35 million dollars. As at that time, the
Philippine Government badly needed funds for its activities,
President Quirino, through Governor Miguel Cuaderno of the
Central Bank proposed to the corresponding officials of the U.S.
Government the retention of the 35-million dollars as a loan, and
for its repayment in ten annual installments. After protracted
negotiations the deal was concluded, and the Romulo-Snyder
Agreement was signed in Washington by the then Philippine
Secretary of Foreign Affairs, Carlos P. Romulo, and the then
American Secretary of the Treasury, John W. Snyder.
> In this appeal, the Usaffe Veterans reiterated with extended
arguments, their basic propositions. They insists: first, the money
delivered to the U.S. to the Armed Forces of the Philippine Island
were straight payments for military services; ownership thereof
vested in the Philippine Government upon delivery, and
consequently, there was nothing to return, nothing to consider as
a loan; and second, the Romulo-Snyder Agreement was void
because it was not binding on the Philippine Government for lack
of authority of the officers who concluded the same.

Now then, it is undeniable that upon a final rendition of accounts

by the Philippine Government, a superabit resulted of at least 35
million dollars in favor of the U. S. Instead of returning such
amount in one lump sum, our Executive Department arranged for
its repayment in ten annual installments. Prima facie such
arrangement should raise no valid objection, given the obligation
to return-which we know exists.
Yet plaintiff attempts to block such repayment because many
alleged claims of veterans have not been processed and paid,
Plaintiff obviously calculates that if the return is prevented and the
money kept here, it might manage to persuade the powers-thatbe extend the deadline anew. Hence the two-pronged attack: (a)
no obligation to repay; (b) the officers who promised to repay had
no authority to bind this Government. The first ground has proved
untenable.
On the second, there is no doubt that President Quirino approved
the negotiations. And he had power to contract budgetary loans.
The most important argument, however, rests on the lack of
ratification of the Agreement by the Senate of the Philippines to
make it binding on this Government.

ISSUE:
Whether or not the Rolumo-Snyder Agreement is valid?
RULING:
YES. With regard to the first point, it must be
remembered that the first Congressional Act appropriating S269million expressly said the amount "shall be available for payment
to the Government of the Commonwealth of the Philippines upon
its written request, either in advance of or in reimbursement for all
or any part of the estimated or actual costs" of operation,
mobilization and maintenance of the Philippine Army. Note
carefully, the money is to handle to the Philippine Government
either in advance of expenditures or in reimbursement thereof.
In any system of accounting, advances of funds for expenditures
contemplate disbursements to be reported, and credited if
approved, against such advances, the unexpended sums to be
returned later. Furthermore, it requires as a condition sine qua
non that all expenditures shall first be approved by the
Commanding General, United States Army Forces Army Forces in
the Far East -- evidently contradict appellant's thesis that the
moneys represented straight payments to the Philippine
Government for its armed services, and passed into the absolute
control of such Government.

That the agreement is not a "treaty" as that term is used in the

Constitution, is conceded. The agreement was never submitted to
the Senate for concurrence (Art. VII, Sec. 10 (7). However, it must
be noted that treaty is not the only form that an international
agreement may assume. For the grant of the treaty-making power
to the Executive and the Senate does not exhaust the power of
the government over international relations. Consequently,
executive agreements may be entered with other states and are
effective even without the concurrence of the Senate. It is
observed in this connection that from the point of view of the
international law, there is no difference between treaties and
executive agreements in their binding effect upon states
concerned as long as the negotiating functionaries have remained
within their powers. "The distinction between so-called executive
agreements" and "treaties" is purely a constitutional one and has
no international legal significance".
There are now various forms of such pacts or agreements
entered into by and between sovereign states which do not
necessarily come under the strict sense of a treaty and which do
not require ratification or consent of the legislative body of the
State, but nevertheless, are considered valid international
agreements. In a survey of the practice of States made by
Harvard Research in the Draft Convention in the Law of Treaties it
has been shown that there had been more executive agreements
entered into by States than treaties.

In the leading case of Altman vs, U. S., it was held that "an
international compact negotiated between the representatives of
two sovereign nations and made in the name and or behalf of the
contracting parties and dealing with important commercial
relations between the two countries, is a treaty both internationally
although as an executive agreement it is not technically a treaty
requiring the advice and consent of the Senate.
Nature of Executive Agreements:
Executive Agreements fall into two classes: (1) agreements
made purely as executive acts affecting external relations and
independent of or without legislative authorization, which may be
termed as presidential agreements and (2) agreements entered
into in pursuants of acts of Congress, which have been
designated as Congressional-Executive Agreements.
The Romulo-Snyder Agreement may fall under any of these two
classes, for precisely on September 18, 1946, Congress of the
Philippines specifically authorized the President of the Philippines
to obtain such loans or incur such indebtedness with the
Government of the United States, its agencies or
instrumentalities.
Even granting, arguendo, that there was no legislative
authorization, it is hereby maintained that the Romulo-Snyder
Agreement was legally and validly entered into to conform to the
second category, namely, "agreements entered into purely as
executive acts without legislative authorization." This second
category usually includes money agreements relating to the
settlement of pecuniary claims of citizens. It may be said that this
method of settling such claims has come to be the usual way of
dealing with matters of this kind (Memorandum of the Solicitor of
the Department of State (Nielson) sent to Senator Lodge by the
Under-Secretary of State.

BAYAN vs ZAMORA
FACTS:
> Philippines and the United States of America forged a Military
Bases Agreement which formalized, among others, the use of
installations in the Philippine territory by United States military
personnel. To further strengthen their defense and security
relationship, the Philippines and the United States entered into a
Mutual Defense Treaty. Under the treaty, the parties agreed to
respond to any external armed attack on their territory, armed
forces, public vessels, and aircraft.
> In view of the impending expiration of the RP-US Military Bases
Agreement in 1991, the Philippines and the United States
negotiated for a possible extension of the military bases
agreement. Philippine Senate rejected the proposed RP-US
Treaty of Friendship, Cooperation and Security which, in effect,
would have extended the presence of US military bases in the
Philippines. With the expiration of the RP-US Military Bases
Agreement, the periodic military exercises conducted between the
two countries were held in abeyance. Notwithstanding, the
defense and security relationship between the Philippines and the
United States of America continued pursuant to the Mutual
Defense Treaty.
> the United States panel, headed by US Defense Deputy
Assistant Secretary for Asia Pacific, met with the Philippine panel,
headed by Foreign Affairs Undersecretary to exchange notes on
the complementing strategic interests of the United States and the
Philippines in the Asia-Pacific region. Both sides discussed,
among other things, the possible elements of the Visiting Forces
Agreement (VFA for brevity). Negotiations by both panels on the
VFA led to a consolidated draft text, which in turn resulted to a
final series of conferences and negotiations. Thereafter, then
President Fidel V. Ramos approved the VFA.
> President Joseph E. Estrada, through respondent Secretary of
Foreign Affairs, ratified the VFA.
> The President, acting through respondent Executive Secretary
Ronaldo Zamora, officially transmitted to the Senate of the
Philippines, the Instrument of Ratification, for concurrence
pursuant to Section 21, Article VII of the 1987 Constitution. The
Senate, in turn, referred the VFA to its Committee on Foreign
Relations, and its Committee on National Defense and Security
for their joint consideration and recommendation.
> The Committees submitted Proposed Senate Resolution
recommending the concurrence of the Senate to the VFA.
> Proposed Senate Resolution was approved by the Senate, by a
two-thirds (2/3) vote of its members.
> [1999] VFA officially entered into force after an Exchange of
Notes between respondent Secretary Siazon and United States
Ambassador Hubbard.

> The VFA (9 Articles), provides for the mechanism for regulating
the circumstances and conditions under which US Armed Forces
and defense personnel may be present in the Philippines.
> Via these consolidated petitions for certiorari and prohibition,
petitioners - as legislators, non-governmental organizations,
citizens and taxpayers - assail the constitutionality of the VFA.
RULINGS:

APPLICABLE CONSTITUTIONAL PROVISION:

Section 21, Article VII deals with treatise or international

agreements in general, in which case, the concurrence of at least
two-thirds (2/3) of all the Members of the Senate is required to
make the subject treaty, or international agreement, valid and
binding on the part of the Philippines. This provision lays down the
general rule on treatise or international agreements and applies to
any form of treaty with a wide variety of subject matter, such as,
but not limited to, extradition or tax treatise or those economic in
nature. All treaties or international agreements entered into by the
Philippines, regardless of subject matter, coverage, or particular
designation or appellation, requires the concurrence of the Senate
to be valid and effective.
In contrast, Section 25, Article XVIII is a special provision that
applies to treaties which involve the presence of foreign military
bases, troops or facilities in the Philippines. Under this provision,
the concurrence of the Senate is only one of the requisites to
render compliance with the constitutional requirements and to
consider the agreement binding on the Philippines. Section 25,
Article XVIII further requires that foreign military bases, troops, or
facilities may be allowed in the Philippines only by virtue of a
treaty duly concurred in by the Senate, ratified by a majority of the
votes cast in a national referendum held for that purpose if so
required by Congress, and recognized as such by the other
contracting state.
It is our considered view that both constitutional provisions, far
from contradicting each other, actually share some common
ground. These constitutional provisions both embody phrases in
the negative and thus, are deemed prohibitory in mandate and
character. In particular, Section 21 opens with the clause No
treaty x x x, and Section 25 contains the phrase shall not be
allowed. Additionally, in both instances, the concurrence of the
Senate is indispensable to render the treaty or international
agreement valid and effective.
To our mind, the fact that the President referred the VFA to the
Senate under Section 21, Article VII, and that the Senate
extended its concurrence under the same provision, is immaterial.
For in either case, whether under Section 21, Article VII or Section

25, Article XVIII, the fundamental law is crystalline that the

concurrence of the Senate is mandatory to comply with the strict
constitutional requirements.
On the whole, the VFA is an agreement which defines the
treatment of United States troops and personnel visiting the
Philippines. It provides for the guidelines to govern such visits of
military personnel, and further defines the rights of the United
States and the Philippine government in the matter of criminal
jurisdiction, movement of vessel and aircraft, importation and
exportation of equipment, materials and supplies.
Undoubtedly, Section 25, Article XVIII, which specifically deals
with treaties involving foreign military bases, troops, or facilities,
should apply in the instant case. To a certain extent and in a
limited sense, however, the provisions of section 21, Article VII will
find applicability with regard to the issue and for the sole purpose
of determining the number of votes required to obtain the valid
concurrence of the Senate, as will be further discussed
hereunder.

Whether or not the requirements of Section 25 were

complied with when the Senate gave its concurrence
to the VFA?

As to the matter of voting, Section 21, Article VII particularly

requires that a treaty or international agreement, to be valid and
effective, must be concurred in by at least two-thirds of all the
members of the Senate. On the other hand, Section 25, Article
XVIII simply provides that the treaty be duly concurred in by the
Senate.
Applying the foregoing constitutional provisions, a two-thirds vote
of all the members of the Senate is clearly required so that the
concurrence contemplated by law may be validly obtained and
deemed present. While it is true that Section 25, Article XVIII
requires, among other things, that the treaty-the VFA, in the
instant case-be duly concurred in by the Senate, it is very true
however that said provision must be related and viewed in light of
the clear mandate embodied in Section 21, Article VII, which in
more specific terms, requires that the concurrence of a treaty, or
international agreement, be made by a two -thirds vote of all the
members of the Senate. Indeed, Section 25, Article XVIII must not
be treated in isolation to section 21, Article, VII.
As noted, the concurrence requirement under Section 25, Article
XVIII must be construed in relation to the provisions of Section 21,
Article VII. In a more particular language, the concurrence of the
Senate contemplated under Section 25, Article XVIII means that
at least two-thirds of all the members of the Senate favorably vote
to concur with the treaty-the VFA in the instant case.

Whether or not the VFA should be

recognized as a treaty by the United States
of America?
This Court is of the firm view that the phrase recognized as a
treaty means that the other contracting party accepts or
acknowledges the agreement as a treaty. To require the other
contracting state, the United States of America in this case, to
submit the VFA to the United States Senate for concurrence
pursuant to its Constitution, is to accord strict meaning to the
phrase.
Well-entrenched is the principle that the words used in the
Constitution are to be given their ordinary meaning except where
technical terms are employed, in which case the significance thus
attached to them prevails. Its language should be understood in
the sense they have in common use.
Moreover, it is inconsequential whether the United States treats
the VFA only as an executive agreement because, under
international law, an executive agreement is as binding as a
treaty. To be sure, as long as the VFA possesses the elements of
an agreement under international law, the said agreement is to be
taken equally as a treaty.
A treaty, as defined by the Vienna Convention on the Law of
Treaties, is an international instrument concluded between States
in written form and governed by international law, whether
embodied in a single instrument or in two or more related
instruments, and whatever its particular designation. There are
many other terms used for a treaty or international agreement,
some of which are: act, protocol, agreement, compromis d
arbitrage, concordat, convention, declaration, exchange of notes,
pact, statute, charter and modus vivendi. All writers, from Hugo
Grotius onward, have pointed out that the names or titles of
international agreements included under the general term treaty
have little or no legal significance. Certain terms are useful, but
they furnish little more than mere description.
Article 2(2) of the Vienna Convention provides that the provisions
of paragraph 1 regarding the use of terms in the present
Convention are without prejudice to the use of those terms, or to
the meanings which may be given to them in the internal law of
the State.
Thus, in international law, there is no difference between treaties
and executive agreements in their binding effect upon states
concerned, as long as the negotiating functionaries have
remained within their powers. International law continues to make

no distinction between treaties and executive agreements: they

are equally binding obligations upon nations.
In our jurisdiction, we have recognized the binding effect of
executive agreements even without the concurrence of the
Senate or Congress. In Commissioner of Customs vs. Eastern
Sea Trading.
The records reveal that the United States Government, through
Ambassador Thomas C. Hubbard, has stated that the United
States government has fully committed to living up to the terms of
the VFA. For as long as the united States of America accepts or
acknowledges the VFA as a treaty, and binds itself further to
comply with its obligations under the treaty, there is indeed
marked compliance with the mandate of the Constitution.
Worth stressing too, is that the ratification, by the President, of the
VFA and the concurrence of the Senate should be taken as a
clear an unequivocal expression of our nations consent to be
bound by said treaty, with the concomitant duty to uphold the
obligations and responsibilities embodied thereunder.
Ratification is generally held to be an executive act, undertaken
by the head of the state or of the government, as the case may
be, through which the formal acceptance of the treaty is
proclaimed. A State may provide in its domestic legislation the
process of ratification of a treaty. The consent of the State to be
bound by a treaty is expressed by ratification when: (a) the treaty
provides for such ratification, (b) it is otherwise established that
the negotiating States agreed that ratification should be required,
(c) the representative of the State has signed the treaty subject to
ratification, or (d) the intention of the State to sign the treaty
subject to ratification appears from the full powers of its
representative, or was expressed during the negotiation.
In our jurisdiction, the power to ratify is vested in the President
and not, as commonly believed, in the legislature. The role of the
Senate is limited only to giving or withholding its consent, or
concurrence, to the ratification.
With the ratification of the VFA, which is equivalent to final
acceptance, and with the exchange of notes between the
Philippines and the United States of America, it now becomes
obligatory and incumbent on our part, under the principles of
international law, to be bound by the terms of the agreement.
Thus, no less than Section 2, Article II of the Constitution,
declares that the Philippines adopts the generally accepted
principles of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom,
cooperation and amity with all nations.

ABAYA vs EBDANE
The CP I project is one of the four packages comprising the
project for the improvement/rehabilitation of the Catanduanes
Circumferential Road. The road section (Catanduanes
Circumferential Road) is part of the Arterial Road Links
Development Project (Phase IV) funded under Loan Agreement
No. PH-P204 dated December 28, 1999 between the Japan Bank
for International Cooperation (JBIC) and the Government of the
Republic of the Philippines.
FACTS:
> Based on the Exchange of Notes dated December 27, 1999, the
Government of Japan and the Government of the Philippines,
through their respective representatives, have reached an
understanding concerning Japanese loans to be extended to the
Philippines. These loans were aimed at promoting our countrys
economic stabilization and development efforts.
> The Exchange of Notes consisted of two documents: (1) a
Letter from the Government of Japan, signed by Ambassador Ara,
addressed to then Secretary of Foreign Affairs Siazon, confirming
the understanding reached between the two governments
concerning the loans to be extended by the Government of Japan
to the Philippines; and (2) a document denominated as Records
of Discussion where the salient terms of the loans as set forth by
the Government of Japan, through the Japanese delegation, were
reiterated and the said terms were accepted by the Philippine
delegation.
> The Exchange of Notes provided that the loans to be extended
by the Government of Japan to the Philippines consisted of two
loans.
> LOAN 1 - amount Y79,861,000,000.
> Exchange of Notes between the representatives of the two
governments, the Philippines obtained from and was granted a
loan by the JBIC, extended with a view to promoting the economic
stabilization and development efforts of the Republic of the
Philippines.
> JBIC agreed to lend the Philippine Government an amount not
exceeding FIFTEEN BILLION THREE HUNDRED EIGHTY-FOUR
MILLION Japanese Yen (Y 15,384,000,000) as principal for the
implementation of the Arterial Road Links Development Project.
> DPWH, as the government agency tasked to implement the
project, caused the publication of the "Invitation to Prequalify and
to Bid" for the implementation of the CP I project.
> Contract of Agreement was entered into by and between the
DPWH and private respondent China Road & Bridge Corporation
for the implementation of the CP I project.
> Petitioner Plaridel M. Abaya claims that he filed the instant
petition as a taxpayer, former lawmaker, and a Filipino citizen.

> The petitioners insist that Loan Agreement No. PH-P204

between the JBIC and the Philippine Government is neither a
treaty, an international nor an executive agreement that would bar
the application of RA 9184. They point out that to be considered a
treaty, an international or an executive agreement, the parties
must be two sovereigns or States whereas in the case of Loan
Agreement No. PH-P204, the parties are the Philippine
Government and the JBIC, a banking agency of Japan, which has
a separate juridical personality from the Japanese Government.
> The public respondents characterize foreign loan agreements,
including Loan Agreement No. PH-P204, as executive
agreements and, as such, should be observed pursuant to the
fundamental principle in international law of pacta sunt servanda.
They cite Section 20 of Article VII of the Constitution as giving the
President the authority to contract foreign loans.
> The petitioners vigorously assert that Loan Agreement No. PHP204 is neither a treaty, an international agreement nor an
executive agreement. They cite Executive Order No. 459 dated
November 25, 1997 where the three agreements are defined in
this wise:
a) International agreement shall refer to a contract or
understanding, regardless of nomenclature, entered into between
the Philippines and another government in written form and
governed by international law, whether embodied in a single
instrument or in two or more related instruments.
b) Treaties international agreements entered into by the
Philippines which require legislative concurrence after executive
ratification. This term may include compacts like conventions,
declarations, covenants and acts.
c) Executive agreements similar to treaties except that they do
not require legislative concurrence.
> The petitioners mainly argue that Loan Agreement No. PH-P204
does not fall under any of the three categories because to be any
of the three, an agreement had to be one where the parties are
the Philippines as a State and another State. The JBIC, the
petitioners maintain, is a Japanese banking agency, which
presumably has a separate juridical personality from the
Japanese Government.
ISSUE:
Whether or not the loan agreement between Philippines
and Japan in a form of exchange of notes can be considered as
an Executive agreement?

RULING:
YES. The petitioners arguments fail to persuade. The
Court holds that Loan Agreement No. PH-P204 taken in
conjunction with the Exchange of Notes dated December 27,
1999 between the Japanese Government and the Philippine
Government is an executive agreement.
To recall, Loan Agreement No. PH-P204 was executed by and
between the JBIC and the Philippine Government pursuant to the
Exchange of Notes executed by and between Mr. Yoshihisa Ara,
Ambassador Extraordinary and Plenipotentiary of Japan to the
Philippines, and then Foreign Affairs Secretary Siazon, in behalf
of their respective governments. The Exchange of Notes
expressed that the two governments have reached an
understanding concerning Japanese loans to be extended to the
Philippines and that these loans were aimed at promoting our
countrys economic stabilization and development efforts.
In this connection, it is well to understand the definition of an
"exchange of notes" under international law. The term is defined
in the United Nations Treaty Collection in this wise:
An "exchange of notes" is a record of a routine agreement that
has many similarities with the private law contract. The agreement
consists of the exchange of two documents, each of the parties
being in the possession of the one signed by the representative of
the other. Under the usual procedure, the accepting State repeats
the text of the offering State to record its assent. The signatories
of the letters may be government Ministers, diplomats or
departmental heads. The technique of exchange of notes is
frequently resorted to, either because of its speedy procedure, or,
sometimes, to avoid the process of legislative approval.
It is stated that "treaties, agreements, conventions, charters,
protocols, declarations, memoranda of understanding, modus
vivendi and exchange of notes" all refer to "international
instruments binding at international law." It is further explained
thatAlthough these instruments differ from each other by title, they all
have common features and international law has applied basically
the same rules to all these instruments. These rules are the result
of long practice among the States, which have accepted them as
binding norms in their mutual relations. Therefore, they are
regarded as international customary law. Since there was a
general desire to codify these customary rules, two international
conventions were negotiated. The 1969 Vienna Convention on the
Law of Treaties ("1969 Vienna Convention"), which entered into
force on 27 January 1980, contains rules for treaties concluded
between States. The 1986 Vienna Convention on the Law of

Treaties between States and International Organizations ("1986

Vienna Convention"), which has still not entered into force, added
rules for treaties with international organizations as parties. Both
the 1969 Vienna Convention and the 1986 Vienna Convention do
not distinguish between the different designations of these
instruments. Instead, their rules apply to all of those instruments
as long as they meet the common requirements.
Significantly, an exchange of notes is considered a form of
an executive agreement, which becomes binding through
executive action without the need of a vote by the Senate or
Congress.
Agreements concluded by the President which fall short of
treaties are commonly referred to as executive agreements and
are no less common in our scheme of government than are the
more formal instruments treaties and conventions. They
sometimes take the form of exchange of notes and at other times
that of more formal documents denominated "agreements" or
"protocols". The point where ordinary correspondence between
this and other governments ends and agreements whether
denominated executive agreements or exchange of notes or
otherwise begin, may sometimes be difficult of ready
ascertainment. It would be useless to undertake to discuss here
the large variety of executive agreements as such, concluded
from time to time. Hundreds of executive agreements, other than
those entered into under the trade-agreements act, have been
negotiated with foreign governments.

BAYAN MUNA vs ROMULO

FACTS:
> Petitioner Bayan Muna is a duly registered party-list group
established to represent the marginalized sectors of society.
> Respondent Blas F. Ople, now deceased, was the Secretary of
Foreign Affairs during the period material to this case. Romulo
was impleaded in his capacity as then Executive Secretary.
Having a key determinative bearing on this case is the
Rome Statute establishing the International Criminal
Court (ICC) with the power to exercise its jurisdiction
over persons for the most serious crimes of international
concern x x x and shall be complementary to the
national criminal jurisdictions. The serious crimes
adverted to cover those considered grave under
international law, such as genocide, crimes against
humanity, war crimes, and crimes of aggression.
> [2000] The RP, through Charge d Affaires Enrique A. Manalo,
signed the Rome Statute which, by its terms, is subject to
ratification, acceptance or approval by the signatory states. As of
the filing of the instant petition, only 92 out of the 139 signatory
countries appear to have completed the ratification, approval and
concurrence process. The Philippines is not among the 92.
> [E/N BFO-028-03] Ambassador Francis J. Ricciardone sent US
Embassy Note to the Department of Foreign Affairs (DFA)
proposing the terms of the non-surrender bilateral agreement
(Agreement, hereinafter) between the USA and the RP.
> The RP, represented by then DFA Secretary Ople, agreed with
and accepted the US proposals embodied under the US Embassy
Note adverted to and put in effect the Agreement with the US
government. Agreement aims to protect what it refers to and
defines as persons of the RP and US from frivolous and
harassment suits that might be brought against them in
international tribunals. It is reflective of the increasing pace of the
strategic security and defense partnership between the two
countries.
RULINGS:

VALIDITY
OF
AGREEMENT

RP-US

NON-SURRENDER

Petitioners contention perhaps taken unaware of certain wellrecognized international doctrines, practices, and jargons is
untenable. One of these is the doctrine of incorporation, as
expressed in Section 2, Article II of the Constitution, wherein the
Philippines adopts the generally accepted principles of

international law and international jurisprudence as part of the law

of the land and adheres to the policy of peace, cooperation, and
amity with all nations. An exchange of notes falls into the
category of inter-governmental agreements, which is an
internationally accepted form of international agreement. The
United Nations Treaty Collections (Treaty Reference Guide)
defines the term as follows:

An exchange of notes is a record of a routine agreement, that
has many similarities with the private law contract. The
agreement consists of the exchange of two documents, each of
the parties being in the possession of the one signed by the
representative of the other. Under the usual procedure, the
accepting State repeats the text of the offering State to record its
assent. The signatories of the letters may be government
Ministers, diplomats or departmental heads. The technique of
exchange of notes is frequently resorted to, either because of its
speedy procedure, or, sometimes, to avoid the process of
legislative approval.

In another perspective, the terms exchange of notes and
executive agreements have been used interchangeably,
exchange of notes being considered a form of executive
agreement that becomes binding through executive action. On the
other hand, executive agreements concluded by the President
sometimes take the form of exchange of notes and at other times
that of more formal documents denominated agreements or
protocols.

SENATE CONCURRENCE NOT REQUIRED

Article 2 of the Vienna Convention on the Law of Treaties defines

a treaty as an international agreement concluded between states
in written form and governed by international law, whether
embodied in a single instrument or in two or more related
instruments and whatever its particular designation. International
agreements may be in the form of (1) treaties that require
legislative concurrence after executive ratification; or (2) executive
agreements that are similar to treaties, except that they do not
require legislative concurrence and are usually less formal and
deal with a narrower range of subject matters than treaties.

Under international law, there is no difference between treaties
and executive agreements in terms of their binding effects on the
contracting states concerned, as long as the negotiating
functionaries have remained within their powers. Neither, on the
domestic sphere, can one be held valid if it violates the
Constitution. Authorities are, however, agreed that one is distinct
from another for accepted reasons apart from the concurrencerequirement aspect. As has been observed by US constitutional
scholars, a treaty has greater dignity than an executive

agreement, because its constitutional efficacy is beyond doubt, a

treaty having behind it the authority of the President, the Senate,
and the people; a ratified treaty, unlike an executive agreement,
takes precedence over any prior statutory enactment.
The categorization of subject matters that may be covered by
international agreements mentioned in Eastern Sea Trading is not
cast in stone. There are no hard and fast rules on the propriety of
entering, on a given subject, into a treaty or an executive
agreement as an instrument of international relations. The primary
consideration in the choice of the form of agreement is the parties
intent and desire to craft an international agreement in the form
they so wish to further their respective interests. Verily, the matter
of form takes a back seat when it comes to effectiveness and
binding effect of the enforcement of a treaty or an executive
agreement, as the parties in either international agreement each
labor under the pacta sunt servanda principle.

As may be noted, almost half a century has elapsed since the
Court rendered its decision in Eastern Sea Trading. Since then,
the conduct of foreign affairs has become more complex and the
domain of international law wider, as to include such subjects as
human rights, the environment, and the sea. Covered subjects
such as defense, trade, scientific cooperation, aviation, atomic
energy, environmental cooperation, peace corps, arms limitation,
and nuclear safety, among others. Surely, the enumeration in
Eastern Sea Trading cannot circumscribe the option of each state
on the matter of which the international agreement format would
be convenient to serve its best interest.
One type of executive agreement is a treaty-authorized or a
treaty-implementing executive agreement, which necessarily
would cover the same matters subject of the underlying treaty.
Indeed, an executive agreement that does not require the
concurrence of the Senate for its ratification may not be used to
amend a treaty that, under the Constitution, is the product of the
ratifying acts of the Executive and the Senate. The presence of a
treaty, purportedly being subject to amendment by an executive
agreement, does not obtain under the premises.
The right of the Executive to enter into binding agreements
without the necessity of subsequent Congressional approval has
been confirmed by long usage. From the earliest days of our
history, we have entered executive agreements covering subjects
such as commercial and consular relations, most favored-nation
rights, patent rights, trademark and copyright protection, postal
and navigation arrangements and the settlement of claims. The
validity of these has never been seriously questioned by our
courts.

AGREEMENT NOT IN CONTRAVENTION OF THE

ROME STATUTE

Petitioners suggestion that the RP, by entering into the

Agreement, violated its duty required by the imperatives of good
faith and breached its commitment under the Vienna Convention
to refrain from performing any act tending to impair the value of a
treaty, e.g., the Rome Statute has to be rejected outright. For
nothing in the provisions of the Agreement, in relation to the
Rome Statute, tends to diminish the efficacy of the Statute, let
alone defeats the purpose of the ICC.
Moreover, under international law, there is a considerable
difference between a State-Party and a signatory to a treaty.
Under the Vienna Convention on the Law of Treaties, a signatory
state is only obliged to refrain from acts which would defeat the
object and purpose of a treaty; whereas a State-Party, on the
other hand, is legally obliged to follow all the provisions of a treaty
in good faith.
In the instant case, it bears stressing that the Philippines is only a
signatory to the Rome Statute and not a State-Party for lack of
ratification by the Senate. Thus, it is only obliged to refrain from
acts which would defeat the object and purpose of the Rome
Statute. Any argument obliging the Philippines to follow any
provision in the treaty would be premature.
As a result, petitioners argument that State-Parties with nonsurrender agreements are prevented from meeting their
obligations under the Rome Statute, specifically Arts. 27, 86, 89
and 90, must fail. These articles are only legally binding upon
State-Parties, not signatories.

Furthermore, a careful reading of said Art. 90 would show that the
Agreement is not incompatible with the Rome Statute.
Specifically, Art. 90(4) provides that [i]f the requesting State is a
State not Party to this Statute the requested State, if it is not
under an international obligation to extradite the person to the
requesting State, shall give priority to the request for surrender
from the Court. x x x In applying the provision, certain undisputed
facts should be pointed out: first, the US is neither a State-Party
nor a signatory to the Rome Statute; and second, there is an
international agreement between the US and the Philippines
regarding extradition or surrender of persons, i.e., the Agreement.
Clearly, even assuming that the Philippines is a State-Party, the
Rome Statute still recognizes the primacy of international
agreements entered into between States, even when one of the
States is not a State-Party to the Rome Statute.

SOVEREIGNTY LIMITED BY INTERNATIONAL

AGREEMENTS

As it were, the Agreement is but a form of affirmance and

confirmance of the Philippines national criminal jurisdiction.
National criminal jurisdiction being primary, as explained above, it
is always the responsibility and within the prerogative of the RP
either to prosecute criminal offenses equally covered by the Rome
Statute or to accede to the jurisdiction of the ICC. Thus, the
Philippines may decide to try persons of the US, as the term is
understood in the Agreement, under our national criminal justice
system. Or it may opt not to exercise its criminal jurisdiction over
its erring citizens or over US persons committing high crimes in
the country and defer to the secondary criminal jurisdiction of the
ICC over them. As to persons of the US whom the Philippines
refuses to prosecute, the country would, in effect, accord
discretion to the US to exercise either its national criminal
jurisdiction over the person concerned or to give its consent to the
referral of the matter to the ICC for trial. In the same breath, the
US must extend the same privilege to the Philippines with respect
to persons of the RP committing high crimes within US territorial
jurisdiction.
Surely, one State can agree to waive jurisdiction to the extent
agreed upon to subjects of another State due to the recognition of
the principle of extraterritorial immunity.
On the rationale that the Philippines has adopted the generally
accepted principles of international law as part of the law of the
land, a portion of sovereignty may be waived without violating the
Constitution. Such waiver does not amount to an unconstitutional
diminution or deprivation of jurisdiction of Philippine courts.

AGREEMENT NOT IMMORAL/NOT AT

VARIANCE WITH PRINCIPLES OF
INTERNATIONAL LAW

Suffice it to state in this regard that the non-surrender agreement,

as aptly described by the Solicitor General, is an assertion by the
Philippines of its desire to try and punish crimes under its national
law. x x x The agreement is a recognition of the primacy and
competence of the countrys judiciary to try offenses under its
national criminal laws and dispense justice fairly and judiciously.

AGREEMENT NEED NOT BE IN THE FORM OF A

TREATY

Republic Act No. (RA) 9851, otherwise known as the

Philippine Act on Crimes Against International Humanitarian
Law, Genocide, and Other Crimes Against Humanity.
We are unable to lend cogency to the view thus taken. For one,
we find that the Agreement does not amend or is repugnant to RA
9851. For another, the view does not clearly state what precise
principles of law, if any, the Agreement alters. And for a third, it
does not demonstrate in the concrete how the Agreement seeks
to frustrate the objectives of the principles of law subsumed in the
Rome Statute.

Far from it, as earlier explained, the Agreement does not
undermine the Rome Statute as the former merely reinforces the
primacy of the national jurisdiction of the US and the Philippines
in prosecuting criminal offenses committed by their respective
citizens and military personnel, among others. The jurisdiction of
the ICC pursuant to the Rome Statute over high crimes indicated
thereat is clearly and unmistakably complementary to the national
criminal jurisdiction of the signatory states.

Moreover, RA 9851 clearly: (1) defines and establishes the crimes
against international humanitarian law, genocide and other crimes
against humanity; (2) provides penal sanctions and criminal
liability for their commission; and (3) establishes special courts for
the prosecution of these crimes and for the State to exercise
primary criminal jurisdiction. Nowhere in RA 9851 is there a
proviso that goes against the tenor of the Agreement.

Besides, even granting that the surrender of a person is

mandatorily required when the Philippines does not exercise its
primary jurisdiction in cases where another court or international
tribunal is already conducting the investigation or undertaking the
prosecution of such crime, still, the tenor of the Agreement is not
repugnant to Sec. 17 of RA 9851. Said legal proviso aptly
provides that the surrender may be made to another State
pursuant to the applicable extradition laws and treaties. The
Agreement can already be considered a treaty following this
Courts decision in Nicolas v. Romulo which cited Weinberger v.
Rossi. In Nicolas, We held that an executive agreement is a treaty
within the meaning of that word in international law and
constitutes enforceable domestic law vis--vis the United States.
Thus, the Agreement, in conjunction with the RP-US Extradition
Treaty, would neither violate nor run counter to Sec. 17 of RA
9851.

More importantly, an act of the executive branch with a foreign

government must be afforded great respect. The power to enter
into executive agreements has long been recognized to be lodged
with the President. As We held in Neri v. Senate Committee on
Accountability of Public Officers and Investigations, [t]he power to
enter into an executive agreement is in essence an executive
power. This authority of the President to enter into executive
agreements without the concurrence of the Legislature has
traditionally been recognized in Philippine jurisprudence. The
rationale behind this principle is the inviolable doctrine of
separation of powers among the legislative, executive and judicial
branches of the government. Thus, absent any clear
contravention of the law, courts should exercise utmost caution in
declaring any executive agreement invalid.

The term jus cogens means the compelling law. Corollary, a jus
cogens norm holds the highest hierarchical position among all
other customary norms and principles. As a result, jus cogens
norms are deemed peremptory and non-derogable. When applied
to international crimes, jus cogens crimes have been deemed so
fundamental to the existence of a just international legal order that
states cannot derogate from them, even by agreement.

These jus cogens crimes relate to the principle of universal
jurisdiction, i.e., any state may exercise jurisdiction over an
individual who commits certain heinous and widely condemned
offenses, even when no other recognized basis for jurisdiction
exists. The rationale behind this principle is that the crime
committed is so egregious that it is considered to be committed
against all members of the international community and thus
granting every State jurisdiction over the crime.